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AveXis (AVXS) shares are surging after the gene therapy researcher announced an agreement to be acquired by Novartis (NVS) for $218 per share, or $8.7B in cash. This comes two years after Citron Research made a short call on the name, with a $5 price target on AveXis. Commenting on the acquisition, Jefferies analyst Michael Yee noted that Novartis' two large gene therapy deals in four months raises the question of "who's next." AVEXIS SALE: AveXis announced that it has entered into an agreement and plan of merger with Novartis pursuant to which Novartis will acquire AveXis for $218 per share or a total of $8.7B in cash. This offer represents a premium of 88% to AveXis' closing price on April 6. The transaction was unanimously approved by the boards of both companies. Completion of the transaction is expected in mid-2018, pending the completion of the tender offer and all other closing conditions. NOT TOO SURPRISING: Following the announcement, Bernstein analyst Vincent Chen told investors that he has long suspected he would see acquisitions in gene therapy and that AveXis could be a prime candidate, so he is "not too surprised to see it go." However, the analyst acknowledged that he had not pegged Novartis as the top contender, initially favoring Roche (RHHBY) given signs of increasing interest in neuroscience and in Spinal Muscular Atrophy, with RG7916. While possible, especially as it would make sense for Roche and Biogen (BIIB), Chen does not believe other bidders for AveXis will emerge. Additionally, the analyst told investors that the announcement should be a positive for others in the space. Large cap biopharma could make moves into the space, as the field becomes increasingly de-risked with continued scientific progress, product approvals, pricing/reimbursement and commercial sales, he contended. OTHER GENE THERAPY PLAYERS: Meanwhile, Jefferies' Yee said he also believes that Novartis' deal for AveXis should remind investors about ongoing "attractiveness within smid-cap biotech," specifically within the gene therapy and cell therapy space. Novartis' two large gene therapy deals in four months will lead to a question of "who's next," the analyst contended. Among the mid-late stage gene therapy players remaining in the space are Bluebird Bio (BLUE), Spark Therapeutics (ONCE), BioMarin (BMRN), Abeona Therapeutics (ABEO), Regenxbio (RGNX), Nightstar Therapeutics (NITE) and Voyager Therapeutics (VYGR), Yee noted. Regarding Biogen, the analyst argued that this is a neutral event as he assumed AveXis would have obtained FDA approval within the next year or so and would have launched regardless of acquisition and would be a future competitor in SMA. Yee concludes that Biogen is being disciplined with its capital given it already has a gene therapy product entering Phase I for SMA and can go after other areas within neuro. WHAT'S NOTABLE: Back in 2016, Citron Research made a short call on AveXis, with a $5 price target. "In the case of AveXis, all you need is a healthy dose of skepticism, willingness to do the research, and a bit of empathy to reveal that there's nothing here beyond a glorified stock promotion. It will soon trade in the single digits," the report read. Citron added: "Given the extremely shady backgrounds of AveXis management and the dubious track records of the lead investigators at the single clinical site at which its drug is trialed, investors need to apply professional skepticism to the much-touted 'two babies sitting up' claim in AveXis's trial findings, absent any proof that these babies in fact were symptomatic for SMA Type 1 disease." PRICE ACTION: In morning trading, shares of AveXis have jumped almost 80% to $207.17, while Novartis' stock trading in New York has gained about 1% to $80.93.

Bernstein analyst Vincent Chen notes that Novartis (NVS) and AveXis (AVXS) announced an agreement for the former to purchase AveXis for $218 per share, a total of $8.7B. The analyst says he has long suspected he would see acquisitions in gene therapy and that AveXis could be a prime candidate, so he is not too surprised to see it go. However, the analyst acknowledges that he had not pegged Novartis as the top contender. Noting that the announcement should be a positive for others in the space, Chen reiterates an Outperform rating and $144 price target on AveXis shares.

04/09/18

JEFF

04/09/18NO CHANGEJEFFBuy

Jefferies ponders other potential suitors for AveXis after Novartis deal

Jefferies analyst Biren Amin asks who else can jump into the mix after AveXis (AVXS) agreed to be acquired by Novartis (NVS) for $218 per share in an all-cash deal. The analyst, who does not expect anti-trust issues to arise with the deal on the table, notes the speculation that Biogen (BIIB) may need to evaluate AveXis at some point. The Novartis deal could be the "trigger that forces it to do so," Amin writes in a research note. Further, the analyst has always felt Roche (RHHBY) could have an interest in AveXis given its development program with RG7916. He points out that AveXis Chairman Dan Welch was the CEO of Intermune when Roche purchased the company in 2014 for $8.3B. AveXis in premarket trading is up 81%, or $94.14, to $210.05.

William Blair analyst Raju Prasad downgraded AveXis (AVXS) to Market Perform after the company reached an agreement to be acquired by Novartis (NVS).

NVSNovartis

$80.74

0.54 (0.67%)

RHHBYRoche

$28.05

-0.27 (-0.95%)

03/27/18

MSCO

03/27/18DOWNGRADEMSCOUnderweight

Roche downgraded to Underweight from Equal Weight at Morgan Stanley

Morgan Stanley analyst Vincent Meunier downgraded Roche to Underweight from Equal Weight, citing the expected impact of biosimilars on margins and increasing competition in lung cancer. The analyst lowered his 2020 sales and earnings estimates and said Roche offers slower growth in terms of both the top and bottom line over 2018-2021 than large pharma peers. He cut his price target on Roche shares to CHF230 from CHF260.

02/27/18

02/27/18UPGRADE

On The Fly: Top five analyst upgrades

Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. Stryker (SYK) upgraded to Neutral from Sell at Citi by analyst Amit Hazan, who believes supply issues at Zimmer Biomet (ZBH) could drive share gains for Stryker. 2. Chipotle (CMG) upgraded to Outperform from Neutral at Baird by analyst David Tarantino, who cited its new CEO and the potential for the company to demonstrate better sales/traffic momentum over the next 12-24 months. He believes it will support investor sentiment given the opportunity for the company to deliver strong earnings power if unit volumes begin to recover. 3. Itron (ITRI) upgraded to Buy from Hold at Cannacord Genuity by analyst Chip Moore, who said he has increased conviction in the company's forward earnings power and finds current share levels a "very compelling" entry point. He notes the stock is down 10% since the SilverSpring Networks deal announcement back in September. Moore's views the combination as compelling and has increased confidence in cost saving potential post close. 4. Winnebago (WGO) upgraded to Outperform from Market Perform at BMO Capital by analyst Gerrick Johnson, who said that the RV market growth -- currently in its 9th year -- will continue at a 10% pace, adding that the company's growth can outgain the competition because of its "operating improvement, enhanced product offering, and emerging trade-up cycle from first time buyers." The analyst also noted that Winnebago will benefit from lower corporate taxes while its stock trades at "significant" valuation discount. 5. Exelixis (EXEL) upgraded to Outperform from Perform at Oppenheimer by analyst Leah Rush Cann. The analyst is now applying a valuation methodology for profitable companies to Exelixis, since the company turned profitable for the full-year 2017. She expects Exelixis will continue to develop its commercial drugs, Cabometyx and Cometriq, while its partner Genentech (RHHBY) will continue to develop Cotellic. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

03/09/18

PIPR

03/09/18NO CHANGETarget $170PIPROverweight

Piper confident in Alexion positioning after Roche trial halt

Piper Jaffray analyst Christopher Raymond keeps an Overweight on Alexion Pharmaceuticals (ALXN) following news of a temporary trial halt for Roche's (RHHBY) Soliris/AXLN1210 challenger RO7112689 in Europe. While a bit early to write off RO7112689 as a competitive threat, the halt highlights the strength of the clinical profile for ALXN1210 and Soliris, Raymond tells investors in a research note. He remains remains confident in Alexion's positioning and bullish on the shares with a $170 price target.

BIIBBiogen

$257.65

-7.33 (-2.77%)

04/05/18

04/05/18DOWNGRADE

On The Fly: Top five analyst downgrades

Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Intel (INTC) downgraded to Hold from Buy at Stifel with analyst Kevin Cassidy citing the peaking server central processing unit cycle and valuation for the downgrade. 2. Johnson Controls (JCI) downgraded to Underperform from Sector Perform at RBC Capital with analyst Deane Dray citing the company's exposure to additional cash flow pressures in fiscal 2018, reduction in fiscal 2020 targets, and a market rotation toward "more defensive names." 3. Ryder (R) downgraded to Underweight from Neutral at JPMorgan with analyst Brian Ossenbeck saying he is making a "longer term call on 2019 expectations," which he believes are too high and embed "significant gains on residual values and used truck sales." 4. Ollie's Bargain Outlet (OLLI) downgraded to Neutral from Buy at BofA/Merrill with analyst Elizabeth Suzuki saying valuation is getting "richer," quarterly comps have been decelerating since 2015, and are now expected to be 1%-2% in 2018. 5. Biogen (BIIB), Pfizer (PFE), Biohaven (BHVN), and Myovant Sciences (MYOV) were downgraded to Equal Weight from Overweight at Barclays. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

Barclays analyst Geoff Meacham made some rating changes while reassessing the Biopharmaceutical sector. Biopharma sentiment has been negative since the start of 2018, despite a modest pick-up in deals and diminished rhetoric on drug pricing, Meacham tells investors in a research note titled "U.S. Biopharmaceuticals: Where to from here?" The analyst believes "more transformative" acquisitions, "clean" Phase 3 wins, and even a relatively strong Q1 earnings season could help "re-rate the sector" and get investors more engaged in the group. Ahead of the Q1 earnings season, Meacham upgraded Merck (MRK) to Overweight from Equal Weight and downgraded to Equal Weight from Overweight shares of Biogen (BIIB), Pfizer (PFE), Biohaven Pharmaceutical (BHVN) and Myovant Sciences (MYOV). The analyst also lowered his price target for Equal Weight-rated AbbVie (ABBV) to $102 from $120, for Equal Weight-rated Amgen (AMGN) to $180 from $180, for Overweight-rated Prothena (PRTA) to $50 from $70 and for Overweight-rated Incyte (INCY) to $135 from $165.

04/05/18

LEHM

04/05/18DOWNGRADETarget $295LEHMEqual Weight

Biogen downgraded to Equal Weight from Overweight at Barclays

Barclays analyst Geoffrey Meacham downgraded Biogen to Equal Weight and lowered his price target for the shares to $295 from $395. The analyst sees limited pipeline catalysts before the Alzheimer readouts in the first half of 2020. He believes the data are too far out to support a bullish on the shares. Meacham, however, remains bullish on the probability of success for aducanumab.

BLUEBluebird Bio

$162.70

-7.45 (-4.38%)

03/28/18

03/28/18NO CHANGE

Bluebird Bio and Celegene to co-develop bb2121 anti-BMCA therapy

Bluebird Bio (BLUE) and Celgene (CELG) announced that the companies have entered into an agreement to co-develop and co-promote bb2121, an investigational anti-B-cell maturation antigen, or BCMA chimeric antigen receptor, or CAR, T cell therapy for the potential treatment of patients with relapsed/refractory multiple myeloma in the United States.The companies originally entered into a broad, global strategic research collaboration in 2013 to discover, develop and commercialize novel therapies in oncology, which included bb2121.

03/21/18

MSCO

03/21/18NO CHANGETarget $209MSCOEqual Weight

Bluebird Bio price target to $209 from $152 at Morgan Stanley

Morgan Stanley analyst Matthew Harrison raised his price target on Bluebird Bio (BLUE) to $209 from $152, stating that he now expects BCMA therapies to take 50% of the third line market by 2030 and noting that bb2121 has 50% market share there. The new assumptions increase his peak sales forecast to about $2.6B from about $1B, he pointed out. However, Harrison keeps an Equal Weight rating on Bluebird, stating that he would expect new data to be available at ASCO in June, but would also expect to see competitor data potentially from Celgene's (CELG) Juno, Gilead's (GILD) Kite, Johnson & Johnson's (JNJ) Nanjing Legend and others.

03/16/18

03/16/18INITIATION

Bluebird Bio initiated with a Sell at Favus

ONCESpark Therapeutics

$62.06

-1.19 (-1.88%)

02/21/18

BERN

02/21/18NO CHANGETarget $60BERNOutperform

Spark Therapeutics price target lowered to $60 from $71 at Bernstein

Bernstein analyst Vincent Chen lowered his price target for Spark Therapeutics to $60 from $71 saying management's comments bode well for SPK-8011, but RPE65 model update takes down valuation. The analyst reiterates an Outperform rating on the shares.

02/21/18

CANT

02/21/18NO CHANGETarget $100CANTOverweight

Spark could have 'transformative year' in 2018, say Cantor Fitzgerald

Cantor Fitzgerald analyst Elemer Piros anticipates 2018 could become a "transformative year" for Spark Therapeutics with advancement of its hemophilia B program into Phase 3 development, greater clarity on Hemophilia A program in mid-2018, and the commercialization of Luxturna. The analyst lowered his price target for the shares to $100 from $105 following the company's Q4 results and reiterates an Overweight rating on the name.

Credit Suisse analyst Martin Auster raised his price target for Spark Therapeutics to $75 from $61 as he expects SPK-8011 to re-emerge as a competitive player in Hemophilia A gene therapy in 2018. The analyst reiterates an Outperform rating on the shares.

BMRNBioMarin

$76.01

-2.69 (-3.42%)

02/23/18

BMOC

02/23/18NO CHANGETarget $125BMOCOutperform

BMO ups BioMarin target to $125, sees upside from guidance

BMO Capital analyst Ian Somaiya last night raised his price target for shares of BioMarin Pharmaceutical to $125 from $119 following the company's Q4 results. The analyst cites better total revenue guidance, higher pricing of pegvaliase, and the benefit of tax reform for the target bump. He believes BioMarin's 2018 guidance provides upside while its pipeline markets. The analyst kept an Outperform rating on the shares.

02/23/18

STFL

02/23/18NO CHANGETarget $102STFLBuy

Scrutiny of BioMarin's pegvaliase likely to increase, says Stifel

Stifel analyst Stephen Willey said BioMarin's better than consensus forecast for its FY18 revenue keeps him confident in the fundamentals of its base business, though the "increasingly measured" commentary from management around pegvaliase's regulatory path/labeling and subsequent launch trajectory reinforces his lack of confidence in his longer-term pegvaliase estimates. He contends that the May 25, 2018 PDUFA date for pegvaliase has become of "heightened importance for investors," Willey told investors earlier. He lowered his price target on BioMarin shares to $102 from $105, largely to reflect a shallower pegvaliase launch trajectory, but keeps a Buy rating on the stock.

SunTrust analyst Edward Nash writes that his review of the latest FDA briefing document released ahead of Adcom meeting discussing the drug development for the treatment of children with achondroplasia may be a positive for Biomarin. Nash notes that the company is "established as a leader in the space" and its current trial design with top-line Phase 3 data expected in late 2019 may exceed FDA expectations. The analyst keeps his Buy rating and a $130 price target on BioMarin.

ABEOAbeona Therapeutics

$14.00

-0.35 (-2.44%)

01/30/18

JEFF

01/30/18NO CHANGETarget $28JEFFBuy

Jefferies views RMAT designation as 'underappreciated win' for Abeona

The Regenerative Medicine Advanced Therapy designation for EB-101 in recessive dystrophic epidermolysis bullosa is an "underappreciated win" for Abeona Therapeutics, Jefferies analyst Maury Raycroft tells investors in a research note. The analyst believes RMAT designation nearly ensures an "accelerated approval" path without need for formal post-approval confirmatory studies. He remains a buyer of Abeona shares with a $28 price target.

01/23/18

01/23/18INITIATION

On The Fly: Top five analyst initiations

Catch up on today's top five analyst initiations with this list compiled by The Fly: 1. Abeona Therapeutics (ABEO) assumed with an Outperform at RBC Capital. 2. Jack Henry (JKHY) initiated with a Neutral at DA Davidson. 3. Woodward (WWD) re-initiated with a Market Perform at Barrington. 4. Navistar (NAV) initiated with a Neutral at Buckingham. 5. Global Blood Therapeutics (GBT) initiated with an Outperform at William Blair. This list is just a portion of The Fly's analyst coverage. To see The Fly's full Street Research coverage, click here.

01/23/18

RBCM

01/23/18INITIATIONTarget $26RBCMOutperform

Abeona Therapeutics assumed with an Outperform at RBC Capital

RBC Capital analyst Kennen MacKay assumed Abeona Therapeutics coverage with an Outperform rating and a price target of $26, removing a Speculative Risk tag from the stock. MacKay says Abeona is an "emerging gene therapy player with a promising diversified pipeline of late- and early-stage assets targeting metabolic and dermatologic rare diseases", and he is positive on 2018 catalysts with anticipated data "validating datasets for MPS and/or RDEB".

RGNXRegenxbio

$27.20

-1.1 (-3.89%)

03/12/18

EVER

03/12/18DOWNGRADETarget $35EVERIn Line

Regenxbio downgraded to In Line on valuation at Evercore ISI

As previously reported, Evercore ISI downgraded Regenxbio to In Line from Outperform and raised its price target to $35 from $30. Analyst Josh Schimmer cites the strong run in shares and notes value of the company will depend heavily on Regenxbio's ability to successfully develop and commercialize its own compelling gene therapy products.

Catch up on today's top five analyst initiations with this list compiled by The Fly: 1. Ball Corp. (BLL) initiated with a Buy at UBS. 2. Deciphera (DCPH) was initiated with a Buy at Nomura Instinet, an Outperform at JMP Securities, and an Overweight at JPMorgan. 3. Nightstar Therapeutics (NITE) was initiated with an Outperform at Leerink, BMO Capital, and Wedbush, and a Buy at Jefferies. 4. Roku (ROKU) initiated with an Outperform at William Blair, a Perform at Oppenheimer, a Sector Perform at RBC Capital, an Equal Weight at Morgan Stanley, and a Neutral at Citi. 5. Tableau (DATA) initiated with a Buy at Needham. This list is just a portion of The Fly's analyst coverage. To see The Fly's full Street Research coverage, click here.

02/27/18

MZHO

02/27/18INITIATIONTarget $20MZHOBuy

Nightstar Therapeutics initiated with a Buy at Mizuho

Mizuho analyst Difei Yang started Nightstar Therapeutics with a Buy rating and $20 price target. The analyst believes the company, with a Phase III pivotal trial of NSR-REP1 starting in the first half of 2018, is leading the way in gene therapy for the treatment of choroideremia, a rare inherited retinal disease. Yang sees "strong potential" for NSR-REP1 with additional upside from the company's earlier-stage pipeline products.

01/03/18

CHDN

01/03/18INITIATIONTarget $40CHDNBuy

Nightstar Therapeutics initiated with a Buy at Chardan

Chardan analyst Gbola Amusa started Nightstar Therapeutics with a Buy rating and $40 price target, citing the potential for its lead asset, NSR-REP1, for the treatment of choroideremia.

VYGRVoyager Therapeutics

$17.37

-0.76 (-4.19%)

03/12/18

WEDB

03/12/18DOWNGRADEWEDBNeutral

Voyager Therapeutics downgraded to Neutral from Outperform at Wedbush

03/12/18

03/12/18DOWNGRADE

On The Fly: Top five analyst downgrades

Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Ranger Energy (RNGR) downgraded to Market Perform from Outperform at Wells Fargo with analyst Judson Bailey saying the growth and margin improvement story he originally forecasted has come in "well below expectations along with disappointing free cash flow." 2. Voyager Therapeutics (VYGR) was downgraded to In Line from Outperform at Evercore ISI and to Neutral from Outperform at Wedbush. 3. HubSpot (HUBS) downgraded to In Line from Outperform at Evercore ISI with analyst Kirk Materne saying he is taking a "few chips off the table" and sees more balanced risk/reward at current levels. 4. XL Group (XL) downgraded to Market Perform from Outperform at JMP Securities with analyst Matthew Carletti saying that he sees low odds of a superior offer following the company's announcement of a deal to be acquired by AXA (AXAHY) for $57.60 per share in cash. 5. Blackbaud (BLKB) downgraded to Underperform from In Line at Evercore ISI with analyst Kirk Materne saying Blackbaud's valuation reflects the current cloud transition and lower tax rate and is full relative to the company's TTM organic growth rate. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

03/12/18

03/12/18DOWNGRADETarget $29Neutral

Voyager downgraded to Neutral after Parkinson's drug data at Wedbush

As previously reported, Wedbush analyst David Nierengarten downgraded Voyager Therapeutics to Neutral from Outperform, stating that data from its Phase 1 study of VY-AADC were "on the whole positive," though inconsistencies in dose response and variability in L-dopa usage "complicates" the story and raise questions on activity that could complicate the upcoming Phase 2/3 trial. However, Nierengarten raised his price target on Voyager shares to $29 from $22.